Barbados And US Hold Top Level Tax Talks On Corporate Inversion

by Amanda Banks, Tax-News.com, London

18 September 2002

High level talks between US representatives and the Barbadian government began on Monday, according to a Barbados Daily Nation report.

The newspaper revealed that the talks are concerned with 'limitation of the benefits' which US companies receive when they relocate to Barbados, and have come about as a result of the recent furore over corporate inversions in the United States.

An unnamed government source told the Daily Nation that the United States first announced its desire to discuss features of the double taxation agreement with Barbados some time ago, after the US Treasury submitted a report suggesting that the Caribbean jurisdiction represents a major location for American companies looking to relocate offshore for tax purposes. The nation was then listed again in the new Homelands Security Act as a tax haven, a decision which has alarmed the Barbados government.

'This does not make sense when the same Bush administration was the one which determined that Barbados was not a tax haven when the Organisation for Economic Cooperation and Development had blacklisted us,' the government source mused. 'That's why we have been very proactive on this issue.'

The seriousness with which the Barbadian authorities are viewing the three day talks can be seen by the number of high level personnel attending the meetings.

According to the Daily Nation report, in addition to Minister of Economic Development Reginald Farley, Attorney-General Mia Mottley, and Dr Richard Cheltenham QC (who led the negotiations that established the treaty in the 1980s), Yolande Bannister (who also assisted in the treaty negotiations), the commissioner and deputy commission of the Inland Revenue department, director of international business Lynette Eastmond, Washington advisor Bruce Zagaris, and ambassador to Washington, Michael King have all been invited to participate in the discussions.

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